By Elizabeth Howcroft

European stock markets struggled for direction on Friday, but were still on track for another weekly gain, while Wall Street futures got a boost after data showed U.S. inflation rose less than expected last month.

Wall Street had closed higher on Thursday, as sentiment got a boost from the White House confirming that U.S. President Donald Trump would meet Chinese President Xi Jinping next week as part of his trip through Asia.

At 1242 GMT the pan-European STOXX 600 was flat on the day SXXP, but still on track for a weekly gain. London’s FTSE 100 was up by around 0.1% CURRENCYCOM:UK100.

INFLATION DATA

Wall Street futures rose after the inflation data, with S&P 500 e-minis up 0.6% ES1! and Nasdaq e-minis up 0.9% NQ1!.

The MSCI World Equity index was up by 0.1% EURONEXT:IACWI, set for a 1.3% gain on the week overall.

The Consumer Price Index rose 0.3% last month after climbing 0.4% in August, which was slightly less than the expected 0.4%.

“We expected a hotter than normal reading due to the feed-through of tariffs into consumer prices,” said Brad Conger, chief investment officer at Hirtle Callaghan, in emailed comments.

“Our base case is for CPI to remain elevated over the next 6 months as final prices adjust.”

U.S. stock markets have surged this year, hitting record highs as traders pour money into artificial intelligence and bet that the U.S. Federal Reserve will continue to cut rates. Analysts say there are signs of a bubble.

The Fed is expected to cut rates by 25 basis points at its meeting next week. Traders added to their rate cut bets after Friday’s inflation data.

“It’s just a continuation of a broadly supportive environment for equities where interest rates are broadly coming down across the developed markets, probably with the exception of Japan, volatility after a brief spike has started to come down again, there’s no major earnings surprises,” said Peter Fitzgerald, chief investment officer for macro at Aviva Investors.

“It’s always impossible to predict when a bull market is going to end or what exactly is going to end it,” he said, adding that he would expect an eventual market correction to come from AI and large technology companies.

CANADA TRADE NEGOTIATIONS CANCELLED BY TRUMP

The dollar index was at 98.863, flat on the day DXY.

The Canadian dollar saw limited impact from Trump saying on social media that he was ending all trade negotiations with Canada.

The euro was steady at $1.1628 EURUSD. Euro zone business activity unexpectedly grew at a faster pace in October, data showed. Euro zone government bond yields rose, with Germany’s Bund yields hitting 2.612%, after the data (DE10YT=RR).

Oil prices, which had risen 5% after the U.S. sanctioned major Russian oil companies, eased back down but were still on track for a weekly gain.

Gold was down around 1.2% on the day at $4,075.39 per ounce, and on track for a weekly loss, ending its nine-week winning streak GOLD.

Five of the so-called “Magnificent Seven” U.S. companies at the centre of the artificial intelligence boom, including Apple AAPL and Microsoft MSFT, are due to report earnings next week. Chipmaker Intel’s INTC earnings on Thursday beat expectations.